Australia’s housing markets have this year continued to generally consolidate the recovery in buyer activity and house prices growth that emerged through 2012.
A key factor in this consolidation is the increase so far in 2013 in residential investor activity being experienced by most state housing markets.
According to the ABS, the value of home loans for residential investors is 14.7 percent higher over the first 3 months of this year compared to the same period in 2012.
New South Wales up this year by 25 percent and Western Australia up 17 percent are the main drivers in this investor surge. Investor activity in Victoria is also up over the year rising by 6 percent.
New South Wales however is the engine room for residential investment activity currently accounting for nearly 40 percent of all national activity. Investors in New South Wales now account for a near-record half of all house sales.
Residential investor activity is a key driver of Australian housing markets last year accounting for over $84 billion in lending activity. Currently 43 percent of all national housing loans are for home investors.
Banks and other lending entities are acutely aware of the commercial significance of Australia’s residential investor market. Numerous initiatives are being developed and implemented to engage investors typically by providing dedicated online or shopfront market information hubs and toolkits.
The Commonwealth Bank’s MyWealth residential property investment information hub is a new online facility for investors while the Bank of Melbourne’s interactive Investore located in Melbourne’s CBD is designed as a one-stop shop also for home investor information services.
Banks are increasingly recognising that credible and expert market analysis and insights beyond basic data models are critical elements of the toolset required for investors to optimise their investment decision-making.
Investor activity remains a key element critical to the harmony of Australia’s finely-tuned and robust housing markets. Given the current flight by Australians to bricks and mortar investment, activities designed to enhance the contribution and participation of investors are to be welcomed.
Dr Andrew Wilson is Senior Economist for Australian Property Monitors